5 Stories Impacting The World Today
UK Strikes Build Up
By a large winning margin, British Airways’ cabin crew, members of the Unite union, voted to strike at Heathrow Airport.
Editor’s Remarks: Unite union’s British Airways cabin crew has joined a slew of other groups striking recently in the run up to Christmas. According to Unite, crew earn just £13,000 base salary and £3 per hour in air. Needless to say, British Airways will have to make an improvement on its 2% pay rise offer that it has already made. Airlines have had a relatively strong 2016 but must share the benefits with their crew or else see fewer job applications, more strikes and smaller competitors winning over customers who want fewer flight cancellations.
What to watch: British Airways, EasyJet, Lufthansa, Royal Mail, Southern Rail
Paolo Gentilini, the former foreign minister, has won a confidence vote in the Senate to become the next Italian prime minister.
Editor’s Remarks: Unlike some previous selections, the selection of Gentilini has progressed relatively smoothly. However, Gentilini will be busy calming investors and the entire financial sector, ensuring them that Italy’s weak economy will rebound and the government will support its ailing banks. Realistically, Gentilini will be sure to move focus on the migration crisis that led to the rise of many right-wing movements across Europe and he should. The changes to the constitution will have to wait.
What to watch: Paolo Gentilini, Matteo Renzi, Monte dei Paschi, Syrian Conflict, EUR/USD
NYSE To Buy NSX
Intercontinental Exchange has announced that it will acquire the National Stock Exchange as well as keep it open.
Editor’s Remarks: Intercontinental Exchange now manages NYSE, NYSE MKT, Arca and NSX. The NSX is the smallest bourse in America, and many expected it to be closed this Friday. This is just another of many consolidations within the market with all its members seeking different trade execution models. With investors moving increasingly to exchanges with higher traded volumes, this consolidation could continue.
What to watch: NYSE, BATS, CBOE, Intercontinental Exchange, NSX
Nigeria Plans Major Spending
President Muhammadu Buhari of Nigeria has planned to increase government spending by 20% in 2017 to revive the struggling economy.
Editor’s Remarks: Nigeria has seen not only slumping oil prices but also suffered months of disruption from militants. Nigeria is at risk of seeing its economy contract by almost 2% and has even been excluded from the OPEC cut deal. Hence, it is no surprise Buhari has asked his government for permission to ramp up spending. However, if oil prices do not rise, then Nigeria will have the next issue of a mountain of debt.
What to watch: Brent Crude, WTI, USD/NGN, OPEC Production, Baker Hughes Rig Count
BOJ Making History
The Bank Of Japan (BOJ) will increase its debt maturing over ten years buying programme, therefore, leading to its bond yields falling sharply yesterday.
Editor’s Remarks: It is no secret that the BOJ is doing something incredibly innovative by focusing on the yield curve and trying to keep it under 0% for 10-year debt. In one of the first steps it has taken to help reach this target, it has intervened in its programme and tried to force long-term debt yields back down. This innovative new BOJ may intervene a lot more than previously as it tries to prove its new strategy is working.
What to watch: USD/JPY, GBP/JPY, EUR/JPY